London Stock Exchange rights issue to fund £1.6billion US takeover

THE London Stock Exchange (LSE) is planning to raise £938million in its first-ever rights issue to part fund its £1.6billion takeover of US indices group Frank Russell.

PUBLISHED: 00:01, Sat, Aug 23, 2014

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The LSE is planning to takeover Frank Russell[GETTY]

First agreed in June, the deal, which is set to be approved by shareholders in September, will make the combined group one of the world’s biggest providers of index services.

We will maintain the Russell brand – it is iconic

Finance director David Warren

The announcement of the rights issue came as LSE announced pre-tax profits of £83.6million in the second quarter of the year, a 40 per cent increase on a year earlier. Sales in the three months to June 30 were up 20 per cent to £299.9million. The group’s performance had benefited from good trading in equities and fixed income.

Finance director David Warren said that the Frank Russell brand would not disappear, adding: “We will maintain the Russell brand – it is iconic.”

LSE agreed the deal to buy Frank Russell for £1.6billion from North­western Mutual to increase its presence in the US.

The purchase will propel LSE to number three spot in the fast-growing exchange-traded funds markets, behind S&P Dow Jones and MSCI.